At a House Transportation and Infrastructure Committee Subcommittee on Aviation, on February 8, 2012, government and industry witnesses warned that LightSquared’s proposed terrestrial network would disrupt many aviation GPS receivers. LightSquared’s proposed deployment would disrupt navigation gear including equipment used by aircraft, Lawrence Strickling, administrator of the National Telecommunications and Information Administration, told the FCC (pdf).

“NTIA, the federal agency that coordinates spectrum uses for the military and other federal government entities, has now concluded that there is no practical way to mitigate potential interference at this time. Consequently, the Commission will not lift the prohibition on LightSquared. The International Bureau of the Commission is proposing to (1) vacate the Conditional Waiver Order, and (2) suspend indefinitely LightSquared’s Ancillary Terrestrial Component authority to an extent consistent with the NTIA letter.

The FCC has final say over whether Reston, Virginia-based LightSquared may begin commercial operations.

In response to the NTIA’s recommendation to the FCC, LightSquared said it remains committed to finding a resolution with the federal government and the GPS industry to resolve all remaining concerns.

LightSquared is confident that the parties will continue the on-going efforts to explore all engineering options and alternatives to find a solution to this difficult issue.

The NTIA’s recommendation relied on the flawed conclusions of the PNT ExCOM about LightSquared’s potential impact on GPS.

LightSquared profoundly disagrees with both the NTIA’s and the PNT’s recommendations, which disregard more than a decade of regulatory orders, and in doing so, jeopardize private enterprise, jobs and investment in America’s future.

The company fully expects the agency to recognize LightSquared’s legal rights to build its $14 billion, privately financed network.

In January 2011, the FCC authorized LightSquared to build out a nationwide network of radio transmitters for high-speed Internet access. However, the FCC required LightSquared to resolve GPS interference concerns to the FCC’s satisfaction prior to operating the network.

Unsurprisingly, it appears that Chairman Genachowski wanted to get this issue off his plate before testifying to Congress on Thursday. It now seems the next steps will be a Public Notice, which may request comment on the terms of reference for a future receiver/interference standards proceeding, followed by a proceeding stretching well beyond the November 2012 election. Even if that resulted in a favorable ruling, the NTIA letter highlights that “lower 10? operations would not be phased in for many years (2020 or beyond), which as I’ve indicated previously makes it extremely unlikely that it would be worthwhile preserving the current Cooperation Agreement with Inmarsat.

Indeed, with Inmarsat poised to claim another $56.25M from LightSquared early next week, and the 90 day bankruptcy window for challenging the $40M paid to Inmarsat in November expiring on Thursday this week, a decision may need to be reached on how to proceed very soon.

Lightsquared has one perfectly good geosynchronous satphone satellite in operation and another on the ground, developed at a cost approaching $1 billion dollars. Lightsquared’s 1.6 GHz satellite is largely unused, since Lightsquared never offered a satphone to use it.

Two other working geosynchronous satphone satellites, using the MSS (2.1 GHz) frequency band, TerreStar and ICO declared bankruptcy. Both are now owned by EchoStar, which is expected to launch similar terrestrial LTE service.

EchoStar now has the advantage by owning 40 MHz of interference-free spectrum, nationwide, at 2.1 GHz. It’s expected to team up with T-Mobile, Sprint or AT&T, pending approval of terrestrial use by single mode phones, which would only utilize their terrestrial 2.1 GHz spectrum for nationwide LTE service.

This also disrupts the FCC’s grand plan to free up 300 MHz of spectrum. Satellite spectrum was expected to contribute some 90Mhz to that effort. Eliminating Lightsquared could leave a 50 MHz hole in the FCC’s plans.